Central Bank of Bolivia

Board of Directors

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BOARD RESOLUTION NO. 149/2017

SUBJECT: TREASURY MANAGEMENT - AMENDS THE REGULATION ON MONETIZATION, DISTRIBUTION, AND DESTRUCTION OF MONETARY MATERIAL.

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VIEWED:

• The Political Constitution of the State promulgated on February 7, 2009.
• Law No. 1670 of October 31, 1995 of the Central Bank of Bolivia (BCB).
• The Statute of the BCB approved by Board Resolution No. 128/2005 of October 21, 2005 and subsequent modifications.
• The Regulation on Monetization, Distribution, and Destruction of Monetary Material, approved by Board Resolution No. 021/2016 and its modifications.
• The Report from the Treasury Management BCB-GTES-SAMM-DAMM-INF-2017-106 of October 20, 2017, respectively.
• The Report from the Legal Affairs Management BCB-GAL-SANO-DLBCI-INF-2017-307 of October 20, 2017, respectively.

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CONSIDERING:

• That the Political Constitution of the State establishes in its article 328 that the attributions of the BCB, in coordination with the economic policy determined by the Executive Branch, in addition to those indicated by Law: determine and execute monetary policy, execute exchange rate policy, regulate the payment system, authorize the issuance of currency, and administer international reserves.
• That pursuant to articles 1 and 3 of Law No. 1670, the BCB is the sole monetary and exchange authority of the country with administrative, technical, and financial competence and specialized normative powers of general application, being empowered to formulate policies in monetary, exchange, and payment system matters.
• That the aforementioned Law in its articles 10, 11, 13, and 54, subsections a), o), and m), establishes the functions of the BCB regarding the issuance of banknotes and metallic coins, as well as the attributions of the Board to authorize and supervise the printing, issuance, and destruction of monetary material, being empowered to issue norms and adopt general decisions necessary for its compliance.
• That pursuant to article 30 of Law No. 1670, all financial intermediation entities and financial services, whose operation is authorized by the Superintendence of Banks and Financial Entities, are subject to the normative competence of the BCB, with respect to their relationship as monetary, exchange, and payment system authority.

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//2. B.R. No. 149/2017

• That article 67 of the Statute of the Central Bank of Bolivia establishes that the Treasury Operations Management is responsible for establishing the requirements for the acquisition, distribution, destruction, and administration of monetary material.
• That the Treasury Management through Report BCB-GTES-SAMM-DAMM-INF-2017-106 recommends the modification of the Regulation on Monetization, Distribution, and Destruction of Monetary Material in order to comply with Board instructions regarding the process of counting, classifying, and manual destruction of monetary material, and recommendations from Internal Audit Management.
• That the Legal Affairs Management through Report BCB-GAL-SANO-DLBCI-INF-2017-307 concludes that the modifications of the Regulation on Monetization, Distribution, and Destruction of Monetary Material in the terms expressed in Report BCB-GTES-SAMM-DAMM-INF-2017-106 do not contradict the current legal framework as it is legally appropriate, being the competence of the Board of the Issuing Entity to consider its approval by two-thirds of the votes of all its members, in accordance with what is provided in subsection o) of article 54 of Law No. 1670 and numeral 29 of article 11 of the BCB Statute.

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THEREFORE,

THE BOARD OF DIRECTORS OF THE CENTRAL BANK OF BOLIVIA RESOLVES:

Article 1.- Modify the definition of unfit banknote in article 2 (Definitions), article 10 (Quality of Monetary Material), and include Chapter VI Additional Provisions with the following text:

ARTICLE 3. (TERMS AND DEFINITIONS).

SAYS:

Unfit Banknote: Mutilated, torn banknote, with impressions or writings foreign to its original condition, or that falls within the category of banknotes not suitable for circulation, according to the range of the degree of deterioration of "Boliviano" banknotes in categories 4, 5, and 6, provided it clearly retains its two signatures and a serial number.

SHOULD SAY:

"Unfit Banknote: Is that banknote issued by the Central Bank of Bolivia that clearly retains its two signatures and at least one serial number, and that according to the criteria of 1) Dirt, stains, graffiti, and discoloration and 2) Tears, mutilations, holes, and repairs, established in the 'Manual for the Selection of Boliviano Banknotes', must be withdrawn from circulation".

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//3. B.R. No. 149/2017

Article 10.- (Quality of Monetary Material)

SAYS:

To guarantee the quality of the MM (Monetary Material) that the population has, Financial Intermediation Entities must deliver to the financial consumer, for any type of operation, only fit banknotes according to the BCB's banknote classification range (grades 1, 2, and 3).

SHOULD SAY:

"To guarantee the quality of the monetary material that the population has, Financial Intermediation Entities must deliver to the financial consumer, for any type of operation, only fit banknotes, in accordance with what is established in the Manual for the Selection of Boliviano Banknotes".

Article 2.- This Board Resolution shall enter into force as of February 5, 2018.

Article 3.- The Presidency and General Management are charged with the execution and compliance of this Resolution.

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La Paz, October 24, 2017

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Pablo Ramos Sánchez

Luis Baudoin Olea

Ronald Polo Rivero

Abraham Pérez Alandia

Sergio Velarde Vera